In a letter to Gershom Scholem in 1937, Walter Benjamin wrote that he was "waging an onslaught on [Jung’s] doctrines, especially those concerning archaic images and the collective unconscious", and, even more damning, that in going through one of Jung's earlier essays, he found Jung's "auxiliary services to National Socialism [the Nazi Party] have been in the works for some time." [ The Correspondence of Walter Benjamin and Gershom Scholem, 1932-1940. p. 197. http://books.google.com/books?id=M1JQA66rxsEC ]
These are serious charges, and they seem to have polarized any subsequent comparison of these two intellectual giant's works. Jungian scholarship concentrates more on the psychology of the individual, and so avoids the broad social and political questions that Benjamin addresses. In the same way, scholarship concerning Benjamin rarely dives far enough into the individual psyche to address the issue of "archaic images" vs. "dialectical images" in depth. When Benjamin's relationship to Jung is addressed, it is usually in the context of Benjamin's Marxist politics, and, following the lead of Adorno and Horkheimer, Jung's theory is denounced as justifying Hitler's fascism. This is the case in the following segment from Richard Wolin's Labyrinths: Explorations in the Critical History of Ideas, which nevertheless provides the best summary of Benjamin's proposed essay:
Benjamin’s concept of the “collective unconscious”—one of the methodological keys to the Arcades Project—was explicitly derived from Jung. In the mid-1930s, as the fascistic implications of Jung's theories became apparent, Benjamin came to view a theoretical self-clarification vis-a-vis Jung as an imperative task. He alludes to this project in a 1937 letter to Scholem: "I wish to secure certain methodological fundaments of ‘Paris Arcades’ via a confrontation with the theories of Jung—especially those of the archaic image and the collective unconscious." His proposed study of the differences separating his utilization of these concepts from that of Jung and Klages was rebuffed by the Institute for Social Research. Undoubtedly, Horkheimer et al. were convinced that an engagement with Jung and Klages. even for the sake of broadening the potentials of left-wing Kulturkritic was wholly unacceptable under current historical circumstances, in which the link between vitalism and fascist ideology were present for all to see. Adorno had already vehemently criticized Benjamin‘s uncritical reliance on their theories in “Paris, Capital of the Nineteenth Century“ (the Arcades Exposé)—especially with reference to Benjamin‘s attempt to view the classless society of prehistory as a “golden age“: “Thus disenchantment of the dialectical image leads directly to purely mythical thinking, and here Klages appears as a danger, as did Jung earlier.” [ Wolin, Labyrinth. p. 70. http://books.google.com/books?id=FdkQrXnPpUQC ]
The Adorno quote in Wolin's analysis is taken from a 1935 letter from Adorno to Benjamin. However, Wolin ignores that Adorno himself in a 1937 letter is in favor of Benjamin prioritizing an essay on Jung ahead of one on Baudelaire, which was preferred by Horkheimer and is the one that ended up being written before Benjamin's far-too-early death:
Once again, I have explicitly argued the case why I would really prefer to see the piece on Jung taken in hand before the whole question of the Arcades itself is properly addressed. Max [Horkheimer] will certainly communicate his opinion on this to me in any case. [ Adorno, Theodore and Benjamin, Walter. The Complete Correspondence, 1928-1940. p. 180 http://books.google.com/books?id=HXfe12XjebEC ]
This suggests that Adorno did not consider the issue of the dialectical vs. archaic image sufficiently resolved, and suggests that Adorno was unclear how far Jung's and Benjamin's theories overlapped. Due to Benjamin's early death in 1940, the issue was never resolved, and as far as I have seen in my research, the question still has yet to be seriously addressed to this day!
From my own informal readings, I see a deep unity within Jung and Benjamin. Specifically, I believe there are signficant parallels to be drawn between Benjamin's rejection of a positivist conception of history with its faith in the constant creep of progress and Jung's repeated insistence on the need for people to "withdraw their projections" and learn to look to the "objective psyche," as he later came to call the collective unconscious, as a potential source of answers to life's deepest questions.
It is my belief that if Benjamin had in fact gotten the opportunity to write his essay on Jung, he himself would have found these parallels, and found much use in Jung's psychological model.